The Cost to Produce Part a Was $20 Per Unit

question 104

Multiple Choice

The cost to produce Part A was $20 per unit in 2016.During 2017, it has increased to $23 per unit.In 2017, Supplier Company has offered to supply Part A for $18 per unit.For the make-or-buy decision,

• A)incremental revenues are $5 per unit.
• B)incremental costs are $3 per unit.
• C)net relevant costs are $3 per unit.
• D)differential costs are $5 per unit.

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Definitions:

Fibula

A long, thin bone located on the lateral side of the tibia in the lower leg.

Ankle Bones

The bones that form the joint connecting the foot to the leg, including the tibia, fibula, and talus.

Nasal Cavity

The large air-filled space above and behind the nose in the middle of the face, involved in breathing and smelling.

Wrist

The joint connecting the hand to the forearm, allowing for a wide range of motion and flexibility.